A major youth employment drive backed by £1 billion will help create 200,000 jobs for young people, alongside the biggest transformation of apprenticeships in a decade.
- Major employment drive to help unlock 200,000 new jobs and apprenticeships for next generation
- Major employment drive – backed by large and small businesses and celebrity chef Tom Kerridge – will reverse rising number of young people neither earning nor learning, after a 37 percent increase between 2021 and 2024.
- Additional £1 billion to be invested in grants to help unlock over 200,000 paid jobs for young people, with Jobs Guarantee to be expanded to ages 18-24.
- New foundation apprenticeships in hospitality and retail, with up to £2,000 for employers to support 16-21-year-olds into work.
It comes as apprenticeships starts amongst young people are down 40 percent in the last decade and almost one million young people are not earning or learning – a rise of 248,000 between 2021 and 2024.
To be announced today (Monday 16 March) in a speech by Work and Pensions Secretary Pat McFadden at Waltham Forest College, a “New Deal” for young people includes:
- A new Youth Jobs Grant, through which businesses will receive £3,000 for every young person they hire aged 18-24 who has been on UC and looking for work for six months. This is expected to support 60,000 young people over three years.
- Expansion of the Jobs Guarantee to a wider age range, from 18-21 to 18-24, to create more than 35,000 extra subsidised jobs. This brings the total to be supported through the scheme to over 90,000 in the next three years.
- An Apprenticeship Incentive of £2,000 for each new employee aged 16-24 taken on by an SME. As part of wider reforms, this will drive progress to our target of creating 50,000 more apprenticeships.
- Further reforms to the Growth and Skills Levy to prioritise young apprentices, secure value for money and give school and college leavers more opportunities than ever to build careers in cutting edge industries.
It is the latest step in the Government’s commitment to ensuring every young person aged 16-24 has the opportunity to earn or learn. These changes are backed by an additional £1bn, taking the total investment into the Youth Guarantee and the additional investment in the Growth and Skills Levy to £2.5 billion over the next three years. This will support almost one million young people and help deliver up to 500,000 opportunities to earn and learn.
Amanda Martin MP for Portsmouth South welcomed the news: “When our young people succeed, our area succeeds. I refuse to write off a generation of young people to a life on benefits. It’s an injustice for them and harms our local economy.
“Labour’s Youth Guarantee means that more young people will be able to access training or an apprenticeship. I’m really pleased the Government has pledged £2.5 billion in investment into these new pathways for young people.
“This will mean more opportunities for young people living here to get on in life and to earn or to learn.”
Prime Minister Sir Keir Starmer said: “Backing young people is one of the most important investments we can make in this country’s future.
“We are determined to tackle the rise in youth unemployment by expanding practical routes into work, boosting apprenticeships, and giving employers the clarity they need.
“These reforms underpin our ambition to create an economy that works for everyone, closing the skills gap and supporting more young people into meaningful employment.”
These changes are the biggest reforms to apprenticeships in a decade. For the first time, employers will have more flexibility to upskill their staff through seven new apprenticeship units aligned to Industrial Strategy priorities including artificial intelligence, engineering, clean energy and construction, and we will develop further Units informed by ongoing input from industry.
Foundation apprenticeships, supported with an incentive for employers, will also expand into hospitality and retail from April 2026, building on foundation apprenticeships launched in engineering, manufacturing and digital. These entry-level opportunities will support young people aged 16 to 21 as they take the first step on the career ladder and move from education into lasting employment.
The reforms are backed by Michelin Star celebrity chef Tom Kerridge, who has provided dozens of apprenticeships at his pubs.
Alongside this, the Growth and Skills Levy will be changed to reprioritise investment where it is needed most, to ensure that young people can access the jobs essential to our economy’s growth as well as ensure apprenticeships remain fit for purpose and prioritise value for money.
This means apprenticeship standards that do not meet the country’s skills priorities or take resources away from opportunities for young people and could be better delivered through on the job training will be defunded.
Work and Pensions Secretary Pat McFadden said: “These measures will give life-changing opportunities to young people and significantly reverse the increase we inherited in those not in education, employment or training.
“We are focusing funding where it’s needed most and giving employers the flexibility and support they’ve asked for.
“These reforms will give young people a vital first step on the career ladder and help business leaders recruit the talent that will grow their companies.”
Michelin Star chef Tom Kerridge said: “I welcome this announcement which will provide amazing opportunities to young people looking to get into this industry and others, to learn a trade and earn along the way.
“I’ve trained apprentices in my restaurants, and I know what a great start it gives them in their careers, and these incentives will give our industry a great boost. I’m pleased Pat McFadden has made this a priority.”
With 7.3 million people in the UK currently lacking the essential digital skills needed for work, the Government has launched a new AI and automation practitioner apprenticeship to help workers and businesses harness artificial intelligence. The first cohort will be getting underway this month.
The 18-month Level 4 apprenticeship will train workers to identify where AI can save time, cut costs, integrate digital systems and use AI safely and responsibly.
McFadden is expected to cite the rise of artificial intelligence as a major shift driving the urgency of these reforms as part of his speech on Monday.
From Autumn 2026, we are expanding the Jobs Guarantee to all eligible 18-24 year-olds who are on Universal Credit and have been looking for work for 18 months. They will benefit from 25 hours a week of fully subsidised paid work for six months. Young people on the scheme will be paid at the relevant minimum wage and also receive fully funded wrap around support.
The funding increase builds on a wide range of measures the Government is bringing forward to support young people, including expanded funding for youth trailblazers, and a major investigation spearheaded by Alan Milburn into the barriers preventing the young from accessing work.
